RBI imposes monetary penalty on Canara Bank

Case Brief

By order dated January 07, 2025, RBI imposed a monetary penalty of ₹1,63,60,000 on Canara Bank under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. The penalty followed ISE 2023 supervisory findings and a show-cause process. RBI said the sustained charges were non-compliance with its directions on Priority Sector Lending - Targets and Classification, Interest Rate on Deposits, and Financial Inclusion - Access to Banking Services - Basic Savings Bank Deposit Account (BSBDA). The specific findings were that the bank collected loan-related charges in certain priority sector loans up to ₹25,000, did not pay interest on certain savings bank deposit accounts, and simultaneously maintained Savings Bank Deposit accounts and BSBD accounts for the same customers.